ABSORPTION RATE Back to topThe ratio of the number of properties in an area that have been sold against the number available. Used to show the volatility of a market.

ABSTRACTION METHOD Back to topThis method of estimating the value of property uses similar properties available in the same market to extract the value of a parcel of land.

ACCELERATION CLAUSE Back to topA provision in a mortgage that gives the lender the right to demand immediate payment of the outstanding loan balance under certain circumstances. Usually when the borrower defaults on the loan.

ACCESSORY BUILDING Back to topA building separate from the main structure on a property. Often used for a specific purpose, such as a workshop, storage shed or garage.

ACCRETION Back to topThe natural growth of a piece of land resulting from forces of nature

ACRE Back to top43,560 square feet. A measurement of area.

ACTUAL AGE Back to topThe amount of time that has passed since a building or other structure was built. See also: EFFECTIVE AGE

ADJUSTMENT DATE Back to topThe date the interest rate changes on an adjustable rate mortgage.

AD VAL OREM TAX Back to topTaxes assessed based on the value of the land and improvements

ADDENDUM Back to topA supplement to any document that contains additional information pertinent to the subject. Appraisers use an addendum to further explain items for which there was inadequate space on the standard appraisal form.

ADJUSTABLE-RATE MORTGAGE (ARM) Back to topA type of mortgage where the interest rate varies based on a particular index, normally the prime lending rate.

ADJUSTED BASIS Back to topThe value of an asset (property or otherwise) that includes the original price plus the value of any improvement, and less any applicable depreciation.

ADJUSTED SALES PRICE Back to topAn opinion of a property's sales price, after adjustments have been made to account for differences between it and another comparable property.

AESTHETIC VALUE Back to topThe additional value a property enjoys based on subjective criteria such as look or appeal.

AFFIRMATION Back to topA declaration that a certain set of facts are truthful.

AFFORDABILITY ANALYSIS Back to topA calculation used to determine an individual's likelihood of being able to meet the obligations of a mortgage for a particular property. Takes into account the down payment, closing costs and on-going mortgage payments.

AGENT Back to topA person who has been appointed to act on behalf of another for a particular transaction.

AMENITY Back to topAny feature of a property that increases its value or desirability. These might include natural amenities such as location or proximity to mountains, or man-made amenities like swimming pools, parks or other recreation.

AMERICAN SOCIETY OF APPRAISERS Back to topAn organization of appraisal professionals and others interested in the appraisal profession.

AMORTIZATION Back to topThe repayment of a loan through regular periodic payment.

AMORTIZATION SCHEDULE Back to topThe breakdown of individual payments throughout the life of an amortized loan, showing both principal contribution and debt service (interest) fees.

AMORTIZATION TERM Back to topThe length of time over which an amortized loan is repaid. Mortgages are commonly amortized over 15 or 30 years.

AMPERAGE Back to topA measure of electric current describing the magnitude.

ANNUAL PERCENTAGE RATE (APR) Back to topThe rate of annual interest charged on a loan.

ANNUITY Back to topA sum of money paid at regular intervals, often annually.

APPLICATION Back to topA form used to apply for a mortgage loan that details a potential borrower's income, debt, savings and other information used to determine credit worthiness.

APPRAISAL Back to topA ''defensible'' and carefully documented opinion of value. Most commonly derived using recent sales of comparable properties by a licensed, professional appraiser.

APPRAISAL FOUNDATION Back to topA not-for-profit educational organization established by the appraisal profession in the United States in 1987. It is dedicated to the advancement of professional valuation and responsible for establishing, improving, and promoting the Uniform Standards of Professional Appraisal Practice (USPAP).

APPRAISAL PRINCIPLES Back to topThe basic building blocks of the property valuation process, including property inspection, market analysis and basic economics.

APPRAISAL REPORT Back to topThe end result of the appraisal process usually consists of one major standardized form such as, the Uniform Residential Appraisal Report form 1004, as well as all supporting documentation and additional detail information. The purpose of the report is to convey the opinion of value of the subject property and support that opinion with corroborating information.

APPRAISAL STANDARDS BOARD (ASB) Back to topAn independent board of the APPRAISAL FOUNDATION, which writes, amends, and interprets USPAP. The ASB is composed of up to seven appraisers appointed by the Foundation's Board of Trustees. The ASB holds public meetings throughout the year to interpret and amend USPAP.

APPRAISED VALUE Back to topAn opinion of the fair market value of a property as developed by a licensed, certified appraiser following accepted appraisal principals.

APPRAISER Back to topAn educated, certified professional with extensive knowledge of real estate markets, values and practices. The appraiser is often the only independent voice in any real estate transaction with no vested interest in the ultimate value or sales price of the property.

APPRECIATION Back to topThe natural rise in property value due to market forces.

ARMS LENGTH TRANSACTION Back to topAny transaction in which the two parties are unconnected and have no overt common interests. Such a transaction most often reflects the true market value of a property.

ASSESSED VALUE Back to topThe value of a property according to jurisdictional tax assessment.

ASSESSMENT Back to topThe function of assigning a value to a property for the purpose of levying taxes.

ASSESSMENT RATIO Back to topThe comparative relationship of a property's assessed value to its market value.

ASSESSOR Back to topThe jurisdictional official who performs the assessment and assigns the value of a property.

ASSET Back to topAny item of value which a person owns.

ASSIGNMENT Back to topTransfer of ownership of a mortgage usually when the loan is sold to another company.

ASSUMABLE MORTGAGE Back to topA mortgage that can be taken over by the buyer when a home is sold.

ASSUMPTION Back to topWhen a buyer takes over, or "assumes" the sellers mortgage.

ATTACHED HOUSING Back to topAny number of houses or other dwellings which are physically attached to one another, but are occupied by a number of different people. The individual houses may or may not be owned by separate people as well.

BACKFILL Back to topThe slope of the ground around a house.

BALL COCK VALVE Back to topThe valve inside a toilet tank that controls the filling of the tank.

BALLOON MORTGAGE Back to topA mortgage loan in which the monthly payments are not large enough to repay the loan by the end of the term. So at the end of the term, the remaining balance comes due in a single large payment.

BALLOON PAYMENT Back to topThe final large payment at the end of a balloon mortgage term.

BANKRUPTCY Back to topWhen a person or business is unable to pay their debts and seeks protection of the state against creditors. Bankruptcies remain on credit records for up to ten years and can prevent a person from being able to get a loan.

BEAM Back to topA structural supporting member.

BILL OF SALE Back to topA physical receipt indicating the sale of property.

BIWEEKLY MORTGAGE Back to topA mortgage where you make "half payments" every two weeks, rather than one payment per month. This results in making the equivalent of 13 monthly payments per year, rather than 12, significantly reducing the time it takes to pay off a thirty year mortgage.

BLIGHTED AREA Back to topAny region of a city or town that has fallen into disrepair or otherwise has become undesirable.

BONA FIDE Back to topAny genuine offer, made without intent to defraud or deceive.

BRIDGE FINANCING Back to topAn interim loan made to facilitate the purchase of a new home before the buyer's current residence sells and its equity is available to fund the new purchase.

BRIDGING Back to topStructural members used between beams to strengthen the structure.

BROKER Back to topAn individual who facilitates the purchase of property by bringing together a buyer and a seller.

BTU Back to topBritish Thermal Unit. A unit of measurement used to describe heating or cooling capacity.

BUFFER ZONE Back to topA segment of land between two disparate municipal zones which acts as a shield to keep one zone from encroaching upon the other. Often used to separate residential districts from commercial areas.

BUILDING CODE Back to topRegulations that ensure the safety and material compliance of new construction within a municipality. Building codes are localized to ensure they are adequate to meet the risk of common hazards.

BUILDING LINE OR SETBACK Back to topThe statutory distance between buildings and the property line, imposed by municipalities, home associations, or other agreements.

BUILT-INS Back to topSpecific items of personal property which are installed in a real estate improvement such that they become part of the building. Built-in microwave ovens and dishwashers are common examples.

BUNGALOW Back to topA one-story, home-style dating from the early twentieth century. Often characterized by a low-pitched roof.

BUY DOWN Back to topExtra money paid in a lump sum to reduce the interest rate of a fixed rate mortgage for a period of time. The extra money may be paid by the borrower, in order to have a lower payment at the beginning of the mortgage. Or paid by the seller, or lender, as incentive to buy the property or take on the mortgage.

BX CABLE Back to topElectrical cable shrouded in a galvanized steel outer cover.

CALL OPTION Back to topA clause in a mortgage which allows the lender to demand payment of the outstanding balance at a specific time.

CAP Back to topAssociated with Adjustable Rate Mortgages. A limit on how high monthly payments or how much interest rates may change within a certain time period or the life of the mortgage.

CAPE COD COLONIAL Back to topA single-story house style made popular in New England. Often characterized by a steep roof with gables.

CAPITAL Back to topAccumulated goods and money which is most often used to generate additional income.

CAPITAL EXPENDITURE Back to topAn outlay of funds designed to improve the income-producing capabilities of an asset or to extend its economic life.

CASH-OUT REFINANCE Back to topRefinancing a mortgage at a higher amount than the current balance in order to transform a portion of the equity into cash.

CAULKING Back to topA pliable material used to seal cracks or openings such as around windows.

CAVEAT EMPTOR Back to topLiterally translated: ''Let the buyer beware.'' A common business tenet whereby the buyer is responsible for verifying any and all claims by the seller of property.

CERTIFICATE OF DEPOSIT Back to topA document showing that the bearer has a certain amount of money, at a particular amount interest, on deposit with a financial institution.

CERTIFICATE OF DEPOSIT INDEX Back to topAn index based on the interest rate of six month CD's. Used to set interest rates on some Adjustable Rate Mortgages.

CERTIFICATE OF ELIGIBILITY Back to topA document issued by the Veterans Administration that certifies eligibility for a VA loan.

CERTIFICATE OF OCCUPANCY Back to topIssued by an appropriate jurisdictional entity, this document certifies that a building complies with all building codes and is safe for use or habitation.

CERTIFICATE OF REASONABLE VALUE (CRV) Back to topUsually based on an independent appraisal, a CRV for a particular property establishes the maximum amount which can be secured by a VA mortgage.

CERTIFICATE OF TITLE Back to topA document designating the legal owner of a parcel of real estate. Usually provided by a title or abstract company.

CERTIFIED GENERAL APPRAISER Back to topGenerally, any professional who has met the local or state requirements, and passed the appropriate certification exam, and is capable of appraising any type of property.

CERTIFIED RESIDENTIAL APPRAISER Back to topA sub-classification of appraiser who is only licensed to appraise residential property, usually up to four units.

CHAIN OF TITLE Back to topThe complete history of ownership of a piece of property.

CHATTEL Back to topAny personal property which is not attached to or an integral part of a property. Chattel is not commonly taken into consideration when appraising the value of real property.

CIRCUIT BREAKERS Back to topElectrical devices which automatically open electrical circuits if they are overloaded.

CLEAR TITLE Back to topOwnership of property that is not encumbered by any counter-claim or lien.

CLOSING Back to topA torturous process designed to induce cramping in a home buyer's hands by requiring signature on countless pieces of documentation that nobody has ever read. Or, the process whereby the sale of a property is consummated with the buyer completing all applicable documentation, including signing the mortgage obligation and paying all appropriate costs associated with the sale (CLOSING COSTS).

CLOSING COSTS Back to topAll appropriate costs generated by the sale of property which the parties must pay to complete the transaction. Costs may include appraisal fees, origination fees, title insurance, taxes and any points negotiated in the deal.

CLOSING STATEMENT Back to topThe document detailing the final financial arrangement between a buyer and seller and the costs paid by each.

CO-BORROWER Back to topA second person sharing obligation on the loan and title on the property.

COLLATERAL Back to topAn asset which is placed at risk to secure the repayment of a loan.

COLLECTION Back to topThe process a lender takes to pursue a borrower who is delinquent on his payments in order to bring the mortgage current again. Includes documentation that may be used in foreclosure.

CO-MAKER Back to topA second party who signs a loan, along with the borrower, and becomes liable for the debt should the borrower default.

COMMON LAW Back to topAs opposed to statute law. Laws that have been established by custom, usage and courts over many years.

COMMISSION Back to topA percentage of the sales price or a fixed fee negotiated by an agent to compensate for the effort expended to sell or purchase property.

COMMON AREA ASSESSMENTS Back to topFees which are charged to the tenets or owners of properties to cover the costs of maintaining areas shared with other tenets or owners. Commonly found in condominium, PUD or office spaces.

COMMON AREAS Back to topAny areas, such as entryways, foyers, pools, recreational facilities or the like, which are shared by the tenets or owners of property near by. Commonly found in condominium, PUD or office spaces.

COMMUNITY PROPERTY Back to topIn many jurisdictions, any property which has been acquired by a married couple. The ownership of the property is considered equal unless stipulated otherwise by both parties.

COMPARABLES Back to topAn abbreviated term used by appraisers to describe properties which are similar in size, condition, location and amenities to a subject property whose value is being determined. The Uniform Standards of Professional Appraisal Practice (USPAP) establish clear guidelines for determining a comparable property.

COMPOUND INTEREST Back to topInterest paid on the principal amount, as well as any accumulated interest.

CONCESSIONS Back to topAdditional value granted by a buyer or seller to entice another party to complete a deal.

CONDEMNATION Back to topThe official process by which a property is deemed to be uninhabitable or unusable due to internal damage or other external conditions.

CONDENSATION Back to topThe transition of water vapor to liquid. Typically forms in areas of high humidity.

CONDOMINIUM Back to topA development where individual units are owned, but common areas and amenities are shared equally by all owners.

CONDOMINIUM CONVERSION Back to topCommonly, the conversion of a rental property such as an apartment complex into a CONDOMINIUM-style complex where each unit is owned rather than leased.

CONDUIT Back to topThe pipe through which electric wiring is run.

CONSTRUCTION LOAN Back to topA loan made to a builder or home owner that finances the initial construction of a property, but is replaced by a traditional mortgage one the property is completed.

CONTIGUOUS Back to topConnected to or touching along an unbroken boundary.

CONTINGENCY Back to topSomething that must occur before something else happens. Often used in real estate sales when a buyer must sell a current home before purchasing a new one. Or, when a buyer makes an offer that requires a complete home inspection before it becomes official.

CONTRACT Back to topA legally binding agreement, oral or written, between two parties.

CONVENTIONAL MORTGAGE Back to topA traditional, real estate financing mechanism that is not backed by any government or other agency (FHA, VA, etc.).

CONVERTIBLE ARM Back to topA mortgage that begins as and adjustable, that allows the borrower to convert the loan to a fixed rate within a specific timeframe.

COOPERATIVE (CO-OP) Back to topA form of ownership where each resident of a multiunit property owns a share in a cooperative corporation that owns the building. With each resident having rights to a specific unit within the building.

CORPORATE RELOCATION Back to topA situation where a person's employer pays all or some of the expenses associated with moving from one location to another, usually over a substantial distance. Relocation expenses often include the amounts, such as brokerage fees, incurred in the selling and buying of the employee's primary residence.

COST OF FUNDS INDEX (COFI) Back to topAn index of financial institutions costs used to set interest rates for some Adjustable Rate Mortgages.

COVENANT Back to topA stipulation in any mortgage that, if not met, can be cause for the lender to foreclose.

CREDIT Back to topA loan of money for the purchase of property, real or personal. Credit is either secured by an asset, such as a home, or unsecured.

CREDIT HISTORY Back to topA record of debt payments, past and present. Used by mortgage lenders in determining credit worthiness of individuals.

CREDITOR Back to topA person to whom money is owed.

CREDIT REPORT Back to topA detailed report of an individuals credit, employment and residence history prepared by a credit bureau. Used by lenders to determine credit worthiness of individuals.

CREDIT REPOSITORY Back to topLarge companies that gather and store financial and credit information about individuals who apply for credit.

CUL-DE-SAC Back to topA dead-end street. One with only one entrance/exit.

DATE OF APPRAISAL Back to topThe specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.

DEBT Back to topAn obligation to repay some amount owed. This may or may not be monetary.

DEBT EQUITY RATIO Back to topThe ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.

DEED Back to topA document indicating the ownership of a property.

DEED-IN-LIEU (OF FORECLOSURE) Back to topA document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures.

DEED OF TRUST Back to topA document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.

DEED OF RECONVEYANCE Back to topA document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.

DEED OF RELEASE Back to topA document which dismisses a lien or other claim on a property.

DEED OF SURRENDER Back to topA document used to surrender any claim a person has to a property.

DEFAULT Back to topThe condition in which a borrower has failed to meet the obligations of a loan or mortgage.

DELINQUENCY Back to topThe state in which a borrow has failed to meet payment obligations on time.

DEPOSIT Back to topCash given along with an offer to purchase property, Also called EARNEST MONEY.

DEPRECIATION Back to topThe natural decline in property value due to market forces or depletion of resources.

DETACHED SINGLE-FAMILY HOME Back to topA single building improvement intended to serve as a home for one family.

DISCOUNT POINTS Back to topPoints paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.

DISTRESSED PROPERTY Back to topA mortgaged property which has been foreclosed on.

DOWNSPOUT Back to topThe pipe that water moves through to reach the ground from the rain gutter.

DUE-ON-SALE PROVISION Back to topA clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.

DUPLEX Back to topA single-building improvement which is divided and provides two units which serve as homes to two families.

DWELLING Back to topA house or other building which serves as a home.

DOWN PAYMENT Back to topAn amount paid in cash for a property, with the intent to mortgage the remaining amount due.

EARNEST MONEY DEPOSIT Back to topA cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer.

EASEMENT Back to topThe right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.

EAVE Back to topThe part of the roof that extends beyond the exterior wall.

ECONOMIC DEPRECIATION Back to topThe decline in property value caused by external forces, such as neighborhood blight or adverse development.

ECONOMIC LIFE Back to topThe amount of time which any income-producing property is able to provide benefits to its owner.

EFFECTIVE AGE Back to topThe subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property's effective age to be greater than its actual age.

EMINENT DOMAIN Back to topThe legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.

ENCROACHMENT Back to topA building or other improvement on one property which invades another property or restricts its usage.

ENCUMBRANCE Back to topA claim against a property. Examples are mortgages, liens and easements.

ENERGY EFFICIENCY RATIO Back to topAn efficiency rating system for air conditioning units that corresponds to the number of BTU's output per watt of electricity used.

EQUAL CREDIT OPPORTUNITY ACT (ECOA) Back to topU.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc

EQUITY Back to topThe difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.

EQUITY BUILDUP Back to topThe natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.

ERRORS AND OMISSIONS INSURANCE Back to topAn insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.

ESCROW Back to topAn amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.

ESCROW ACCOUNT Back to topAn account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.

ESCROW ANALYSIS Back to topAn analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.

ESCROW DISBURSEMENTS Back to topThe payout of funds from an escrow account to pay property expenses such as taxes and insurance.

ESTATE Back to topThe total of all property and assets owned by an individual.

EXAMINATION OF TITLE Back to topThe report on the title of a property from the public records or an abstract of the title.

EXCLUSIVE LISTING Back to topAn agreement between the owner of a property and a real estate agent giving the agent exclusive right to sell the property.

EXECUTOR Back to topThe person named in a will to administer the estate.

FACADE Back to topThe front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.

FAIR CREDIT REPORTING ACT Back to topA federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.

FAIR MARKET VALUE Back to topThe price at which two unrelated parties, under no duress, are willing to transact business.

FANNIE MAE Back to topA private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation's largest source of financing for home mortgages.

FASCIA Back to topThe boards that enclose the eaves.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) Back to topThe U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation's financial system by insuring deposits and promoting safe and sound banking practices.

FEDERAL HOUSING ADMINISTRATION (FHA) Back to topA sub-agency of the U.S. Department of Housing and Urban Development created in the 1930's to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.

FEE APPRAISER Back to topA certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.

FEE SIMPLE Back to topA complete, unencumbered ownership right in a piece of property.

FEE SIMPLE ESTATE Back to topA form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.

FHA MORTGAGE Back to topA mortgage that is insured by the Federal Housing Administration (FHA).

FINAL VALUE ESTIMATE Back to topThe opinion of value of a piece of property resulting from an appraisal following the USPAP guidelines.

FIRST MORTGAGE Back to topThe primary loan or mortgage secured by a piece of property.

FIXED-RATE MORTGAGE (FRM) Back to topA mortgage which has a fixed rate of interest over the life of the loan.

FIXTURE Back to topAny piece of personal property which becomes permanently affixed to a piece of real property.

FLASHING Back to topThe metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.

FLOOD INSURANCE Back to topSupplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.

FLOOR PLAN Back to topThe representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.

FLUE Back to topThe furnace exhaust pipe, usually going through the roof.

FLUSH VALVE Back to topThe valve between the toilet bowl and the tank.

FOOTING Back to topThe partially buried support for a vertical structural member such as a post.

FORECLOSURE Back to topThe process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.

FORFEITURE Back to topThe loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.

FOUNDATION Back to topThe solid structural element upon which a structure is built.

FRONTAGE Back to topThe segment of a property that runs along a point of access, such as a street or water front.

FUNCTIONAL OBSOLESCENCE Back to topA decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.

GABLE ROOF Back to topA steeply angled, triangular roof.

GALVANIZED PIPE Back to topIron pipe with a galvanized (zinc) coating.

GAMBREL ROOF Back to topA ''barn-like'' roof, where the upper portion of the roof is less-steeply angled than the lower part.

GENERAL LIEN Back to topA broad-based claim against several properties owned by a defaulting party.

GFI Back to topGround Fault Interrupter. A type of circuit breaker required in areas where water is present.

GINNIE MAE Back to topA wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.

GIRDER Back to topA main supporting beam.

GOVERNMENT MORTGAGE Back to topAny mortgage insured by a government agency, such as the FHA or VA.

GRADE Back to topThe slope of land around a building. Also ground level.

GRANTEE Back to topAny person who is given ownership of a piece of property.

GRANTOR Back to topAny person who gives away ownership of a piece of property.

GROSS AREA Back to topThe sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.

GROUTING Back to topMaterial used around ceramic tile.

GUTTER Back to topThe trough around the edge of the roof that catches and diverts rain.

HALF-SECTION Back to top320 acres.

HAZARD INSURANCE Back to topInsurance covering damage to a property caused by hazards such as fire, wind and accident.

HEADER Back to topThe framing elements above an opening such as a window or door.

HEARTH Back to topThe floor of a fireplace or the area immediately in front of it.

HEIGHT ZONING Back to topA municipal restriction on the maximum height of any building or other structure.

HIDDEN AMENITIES Back to topAssets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.

HIGHEST AND BEST USE Back to topThe most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.

HOME EQUITY CONVERSION MORTGAGE (HECM) Back to topAlso known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM's typically do not have to be repaid until the borrower is no longer occupying the home.

HOME EQUITY LINE OF CREDIT Back to topA type of mortgage loan that allows the borrower to draw cash against the equity in his home.

HOME INSPECTION Back to topA complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.

HOME INSPECTOR Back to topA person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.

HOMEOWNER'S ASSOCIATION Back to topAn organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.

HOMEOWNER'S INSURANCE Back to topA policy which covers a home owner for any loss of property due to accident, intrusion or hazard.

HOMEOWNER'S WARRANTY Back to topAn insurance policy covering the repair of systems and appliances within the home for the coverage period.

HUD MEDIAN INCOME Back to topMedian family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 STATEMENT Back to topA standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.

IMPROVED LAND Back to topAny parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.

IMPROVEMENTS Back to topAny item added to vacant land with the intent of increasing its value or usability.

IMPROVEMENT RATIO Back to topThe comparative value of an improved piece of land to its natural, unaltered state.

INCOME APPROACH Back to topThe process of estimating the value of property by considering the present value of a stream of income generated by the property.

INCOME PROPERTY Back to topA piece of property whose highest and best use is the generation of income through rents or other sources.

INDEPENDENT APPRAISAL Back to topAn estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.

INSPECTION Back to topThe examination of a piece of property, its buildings or other amenities.

INSURABLE TITLE Back to topThe title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.

INTEREST RATE Back to topA percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.

INVESTMENT PROPERTY Back to topAny piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.

JAMB Back to topThe side of a door frame.

JOINT TENANCY Back to topA situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.

JOISTS Back to topHorizontal beams laid on edge to support flooring or a ceiling.

JUDGMENT Back to topAn official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payee's property as collateral.

JUDICIAL FORECLOSURE Back to topA type of foreclosure conducted as a civil suit in a court of law.

JUMBO LOAN Back to topA mortgage loan for an amount greater than the limits set by Fannie Mae and Freddie Mac. Often called non-conforming loans.

LALLY COLUMN Back to topA concrete filled steel pipe used to support beams.

LATE CHARGE Back to topAn extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.

LATENT DEFECTS Back to topAny defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.

LEASE Back to topA contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

LEASEHOLD ESTATE Back to topA type of property ''ownership'' where the buyer actually has a long-term lease on the property.

LEASE OPTION Back to topA lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

LEGAL DESCRIPTION Back to topThe description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.

LENDER Back to topThe person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.

LIABILITIES Back to topA person's outstanding debt obligations.

LIABILITY INSURANCE Back to topInsurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.

LIEN Back to topAny claim against a piece of property resulting from a debt or other obligation.

LIFE CAP Back to topA limit on how far the interest rate can move for an Adjustable Rate Mortgage.

LIKE-KIND PROPERTY Back to topAny property which is substantially similar to another property.

LINE OF CREDIT Back to topAn extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

LIQUID ASSET Back to topAny asset which can be quickly converted into cash at little or no cost, or cash itself.

LOAN Back to topMoney borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

LOAN OFFICER Back to topA person that "sells" loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION Back to topHow a lender refers to the process of writing new loans.

LOAN SERVICING Back to topThe processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.

LOAN-TO-VALUE RATIO (LTV) Back to topThe comparison of the amount owed on a mortgaged property to its fair market value.

LOCK-IN Back to topAn agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

LOCK-IN PERIOD Back to topThe amount of time the lender has guaranteed an interest rate to a borrower.

MAJOR DEFICIENCY Back to topA deficiency that strongly impacts the usability and habitability of a house. Or a deficiency that may be very expensive to repair.

MANUFACTURED HOUSING Back to topOnce known as ''mobile homes,'' manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.

MARGIN Back to topThe difference between the interest rate and the index on an adjustable rate mortgage.

MARGINAL LAND Back to topLand whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.

MASTER ASSOCIATION Back to topAn umbrella organization that is made up of multiple, smaller home owner's associations. Often found in very large developments or condominium projects.

MATURITY Back to topThe date on which the principal balance of a financial instrument becomes due and payable.

METES AND BOUNDS Back to topA traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin.

METROPOLITAN AREA Back to topThe accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.

MINERAL RIGHTS Back to topThe legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.

MISREPRESENTATION Back to topA statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.

MORTGAGE Back to topA financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.

MORTGAGE BANKER Back to topA financial institution that provides primary and secondary mortgages to home buyers.

MORTGAGE BROKER Back to topA person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.

MORTGAGEE Back to topThe entity that lends money in a real estate transaction.

MORTGAGE INSURANCE Back to topA policy that fulfills those obligations of a mortgage when the policy holder defaults or is no longer able to make payments.

MORTGAGE INSURANCE PREMIUM (MIP) Back to topA fee that is often included in mortgage payments that pays for mortgage insurance coverage.

MORTGAGE LIFE INSURANCE Back to topA policy that fulfills the obligations of a mortgage when the policy holder dies.

MORTGAGOR Back to topThe entity that borrows money in a real estate transaction.

MULTI-FAMILY PROPERTIES Back to topAny collection of buildings that are designed and built to support the habitation of more than four families.

NATIONAL ASSOCIATION OF MASTER APPRAISERS (NAMA) Back to topA non profit professional association organized in 1982, dedicated to the advancement of professionalism in real estate appraisal.

NATIONAL SOCIETY OF REAL ESTATE APPRAISERS Back to topAn organization founded in 1956 which promotes standards of professionalism in its members.

NATURAL VACANCY RATE Back to topThe percentage of vacant properties in a given area that is the result of natural turnover and market forces.

NEGATIVE AMORTIZATION Back to topWhen the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest.

NEIGHBORHOOD LIFE-CYCLE Back to topThe evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle.

NEIGHBORHOOD Back to topA subsection of a municipality that has been designated by a developer, economic forces or physical formations.

NET LEASABLE AREA Back to topThe space in a development, outside of the common areas, that can be rented to tenants.

NEW ENGLAND COLONIAL Back to topAn architectural style dating from early American history typified by a two-story building with clapboard siding.

NO-COST LOAN Back to topMany lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

NO-POINT LOAN Back to topA loan with no "points". The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan.

NON-CONFORMING USE Back to topThe use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.

NONLIQUID ASSET Back to topAny asset which can not be quickly converted into cash at little or no cost.

NOTE Back to topA legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

NOTE RATE Back to topThe interest rate stated on a mortgage note.

NOTICE OF DEFAULT Back to topFormal written notice from a lender to a borrower that default has occurred.

OBSOLESCENCE Back to topThe process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities.

OCCUPANCY Back to topA physical presence within and control of a property.

OCCUPANCY RATE Back to topThe percentage of properties in a given area that are occupied.

OCTOPUS RECEPTACLE Back to topAn outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets.

OFF-SITE IMPROVEMENTS Back to topBuildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.

OFF-STREET PARKING Back to topDesignated parking spaces associated with a particular building or other structure which are not located on public streets.

OLD TERMITE ACTIVITY Back to topWhere no termites are currently active, but indications of past activity can be seen.

ON-SITE IMPROVEMENTS Back to topBuildings, structures or other amenities that are erected on a piece of property and contribute to its value.

OPEN SPACE Back to topAny land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.

OPEN SPLICE Back to topAn uncovered electrical connection.

ORIGINAL EQUITY Back to topThe amount of cash a home buyer initially invests in the home.

ORIGINAL PRINCIPAL BALANCE Back to topThe total amount of principal owed on a mortgage loan at the time of closing.

ORIGINATION FEE Back to topRefers to the total number of points paid by a borrower at closing.

OWNER FINANCING Back to topA transaction where the property owner provides all or part of the financing.

OWNER OCCUPIED Back to topThe state of property wherein the owner occupies at least some portion of the property.

PARGING Back to topThe cement coat applied to block foundations.

PARTIAL INTEREST Back to topA shared ownership in a piece of property. May be divided among two or more parties.

PARTIAL PAYMENT Back to topA payment of less than the regular monthly amount. Usually, a lender will not accept partial payments.

PERIODIC PAYMENT CAP Back to topThe limit on how much regular monthly payments on an Adjustable Rate Mortgage can change during one adjustment period.

PERIODIC RATE CAP Back to topThe limit on how much the interest rate on an Adjustable Rate Mortgage can change during any one adjustment period.

PERSONAL PROPERTY Back to topOwned items which are not permanently affixed to the land.

PERSONAL RESIDENCE Back to topThe primary domicile of a person or family.

PLANNED UNIT DEVELOPMENT (PUD) Back to topA coordinated, real estate development where common areas are shared and maintained by an owner's association or other entity.

PLAT Back to topA plan or chart of a piece of land which lays out existing or planned streets, lots or other improvements.

POINT Back to topA percentage of a mortgage amount (one point = 1 percent).

PRE-APPROVAL Back to topThe process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.

PREFABRICATED Back to topAny building or portion thereof which is manufactured and assembled off site, then erected on a property.

PREPAYMENT Back to topPayment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.

PREPAYMENT PENALTY Back to topA fee that may be charged to a borrower who pays off a loan before it is due.

PRE-QUALIFICATION Back to topLess formal that pre-approval, pre-qualification usually means a written statement from a loan officer indicating his or her opinion that the borrower will be able to become approved for a mortgage loan.

PRIME RATE Back to topThe interest rate that banks and other lending institutions charge other banks or preferred customers.

PRINCIPAL Back to topThe amount owed on a mortgage which does not include interest or other fees.

PRINCIPAL BALANCE Back to topThe outstanding balance of principal on a mortgage. Does not included interest due.

PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI) Back to topThe most common constituents of a monthly mortgage payment.

PRIVATE MORTGAGE INSURANCE (PMI) Back to topA form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is less that 20%.

PROPERTY Back to topAny item which is owned or possessed.

PURCHASE AGREEMENT Back to topA written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

QUADRAPLEX Back to topAny building designed to accommodate four families.

QUALIFYING RATIOS Back to topTwo ratios used in determining credit worthiness for a mortgage loan. One is the ratio of a borrower's monthly housing costs to monthly income. The other is a ratio of all monthly debt to monthly income.

QUITCLAIM DEED Back to topA legal document which transfers any ownership an individual has in a piece of property. Often used when the amount of ownership is not known or is unclear.

RAFTER Back to topA structural element of the roof, sloping from the peak to the outer walls.

RANCH HOUSE Back to topAn architectural style typified by a single-story, low-roof construction. Popular in the western U.S.

RATE LOCK Back to topA guarantee from a lender of a specific interest rate for a period of time.

RAW LAND Back to topAny land which has not been developed.

REAL ESTATE Back to topA piece of land and any improvements or fixtures located on that land.

REAL ESTATE AGENT Back to topA licensed professional who facilitates the buying and selling of real estate.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) Back to topA federal law requiring lenders to give full disclosure of closing costs to borrowers.

REAL PROPERTY Back to topLand, improvements and appurtenances, and the interest and benefits thereof.

REALTOR&reg Back to topA real estate agent or broker who is a member of the NATIONAL ASSOCIATION of REALTORS&reg.

RECEPTACLE Back to topAn electrical outlet to plug into.

RECORDER Back to topA local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.

RECORDING Back to topThe filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.

REFINANCE TRANSACTION Back to topA new loan to pay off an existing loan. Typically to gain a lower interest rate or convert equity into cash.

REGISTER Back to topWhere air from a furnace or air conditioning system enters the room.

RELOCATION SERVICE Back to topAny company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.

REMAINING BALANCE Back to topThe amount of principal, interest and other costs that has not yet been repaid.

REMAINING TERM Back to topThe amount of time remaining on the original amortization schedule.

REMODEL Back to topAn activity designed to improve the value or desirability of a property through rebuilding, refurbishing, redecorating or adding on to it.

REPAYMENT PLAN Back to topA plan to repay delinquent payments, agreed upon between a lender and borrower, in an effort to avoid foreclosure.

REPLACEMENT RESERVE FUND Back to topAn account, or fund, setup for the replacement of short life items, such as carpeting, in the common areas of a cooperative property.

RESIDENTIAL PROPERTY Back to topA piece of property whose highest and best use is the maintenance of a residence.

REVOLVING DEBT Back to topA type of credit that allows the borrower/customer to make charges against a predetermined line of credit. The customer then pays monthly installments on the amount borrowed, plus interest.

RIDGE BOARD Back to topThe structural member of a roof where the rafters join at the top.

RIGHT OF FIRST REFUSAL Back to topAn agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.

ROOF PITCH Back to topThe degree of slope in a roof.

RURAL Back to topAn area outside of an established urban area or metropolitan district.

SALE PRICE Back to topThe actual price a property sells for, exclusive of any special financing concessions.

SALES COMPARISON APPROACH Back to topAn appraisal practice which estimates the value of a property by comparing it to comparable properties which have sold recently.

SCARCITY Back to topAn economic principal that dictates the price of a good or service through the interaction of supply and demand. When an item is scarce, its price tends to rise, given a constant demand. Real Estate is a classic example of scarcity.

SECOND MORTGAGE Back to topA loan secured by the equity in a home, when a primary mortgage already exists.

STUD Back to topA vertical framing piece in a wall, generally 2x4 lumber in interior walls.

SUBDIVISION Back to topA residential development that is created from a piece of land which has been subdivided into individual lots.

SUBJECT PROPERTY Back to topA term which indicates a property which is being appraised.

SUMP Back to topA basin into which water drains and from which the water is pumped out.

SURVEY Back to topA specific map of a piece of property which includes the legal boundaries and any improvements or features of the land. Surveys also depict any rights-of-way, encroachments or easements.

SWEAT EQUITY Back to topThe method whereby a home owner develops equity in a property, either during the purchase or throughout its life, by personally constructing improvements rather than paying to have them built.

TAX-EXEMPT PROPERTY Back to topAny property which is not taxed.

TENANCY Back to topThe right to occupy a building or unit.

TENANCY IN COMMON Back to topA form of holding title, whereby there are two or more people on title to a property, ownership does not pass on to the others upon the death of one individual.

THIRD PARTY ORIGINATION Back to topWhen a lender uses a third party to originate and package loans for sale to the secondary market (Fannie Mae, Freddie Mac).

TITLE Back to topA specific document which serves as proof of ownership.

TITLE COMPANY Back to topAn organization which researches and certifies ownership of real estate before it is bought or sold. Title companies also act at the facilitator ensures all parties are paid during the real estate transaction.

TITLE INSURANCE Back to topA policy which insures a property owner should a prior claim arise against the property after the purchase has been completed. This also covers a lender should a question of ownership arise.

TITLE SEARCH Back to topThe process whereby the TITLE COMPANY researches a properties title history and ensures that no outstanding claims exist.

TRANSFER OF OWNERSHIP Back to topAny means by which the ownership of a property changes hands.

TRANSFER OF TAX Back to topTaxes payable when title passes from one owner to another.

TRAP Back to topA bend in water pipe.

TRUSTEE Back to topA fiduciary that holds or controls property for the benefit of another.

TRUTH IN LENDING Back to topA federal law requiring full disclosure by lenders to borrowers of all terms, conditions and costs of a mortgage.

TUDOR Back to topA style of architecture typified by exposed stone, wood and brick construction. Similar in style to English manor homes.

UNDER IMPROVED LAND Back to topA piece of land which has been improved, but not to the full extent of its potential.

UNENCUMBERED PROPERTY Back to topAny property which has no outstanding claims or liens against it.

UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP) Back to topDeveloped in 1986 by the Ad Hoc Committee on Uniform Standards and copyrighted in 1987 by The Appraisal Foundation, USPAP forms the guidelines followed by every licensed and certified real estate appraiser in the United States. The purpose of these Standards is to establish requirements for professional appraisal practice, which includes appraisal, appraisal review, and appraisal consulting. The intent of these Standards is to promote and maintain a high level of public trust in professional appraisal practice.

USEFUL LIFE Back to topThe span of time over which a property can be used or can provide benefits to its owner.

VACANCY RATE Back to topThe current percentage of vacant properties in a given area, regardless of why they are vacant.

VA MORTGAGE Back to topA mortgage that is guaranteed by the Department of Veterans Affairs (VA).

VARIANCE Back to topAn exception to municipal zoning regulations granted for a specific time period to allow for non-conforming use of the land.

VENT PIPE Back to topA pipe allowing gas to escape.

VESTED Back to topHaving the right to use a portion of a fund such as an IRA. Typically vesting occurs over time. If you are 100% vested, you have a right to 100% of the fund.

VETERANS AFFAIRS, DEPARTMENT OF (VA) Back to topThe successor to the Veteran's Administration, this government agency is responsible for ensuring the rights and welfare of our nation's veterans and their dependents. Among other duties, the VA insures home loans made to veterans.

VOLTAGE Back to topAn expression of electric force, or pressure. One volt being the force needed to move one amp against one ohm resistance.

WALK-THROUGH INSPECTION Back to topA process whereby an appraiser examines a property in preparation for estimating its value. Also, the process of inspecting a property for any damage prior to that property being bought or sold.

WARRANTY Back to topAn affidavit given to stipulate the condition of a property. The person giving the warranty assumes liability if the condition turns out to be untrue.

WATT Back to topAn expression of amount of electrical power. Volt times amps equals watts.

WEAR AND TEAR Back to topA term used to indicate the normal damage inflicted on a property through every-day use.

WEATHER STRIPPING Back to topMaterial used around windows and doors to prevent drafts.

WEEP HOLE Back to topDrainage hole that allows water to escape.

ZERO LOT LINE Back to topA municipal zoning category wherein a building or other fixture may abut the property line.

ZONE Back to topA specific area within a municipality or other jurisdiction which conforms to certain guidelines regarding the use of property in the zone. Typical zones include single-family, multi-family, industrial, commercial and mixed-use.

Glen and Dorothy Reiner of Exit Minnesota Lakes Realty service the real estate needs of home buyers and home sellers in search of real estate, homes for sale, condos, investment properties, commercial real estate, new construction, new homes, land, lots, waterfront properties, farms and recreational property in these nearby communities and more!